In the first half of 2008, prices were below zero nearly 20 percent of the time. During March, when negative prices were most frequent, prices were below zero about 33 percent of the time. After mostly taking the summer off, negative power prices were back to near 10 percent in October……..During these negative price periods, suppliers are paying ERCOT to take their power. Consumers (at least at the wholesale level) are getting paid for using power, and the more power consumers use the more they get paid. These prices are a big anti-conservation incentive. You could, as a correspondent put it to me, build a giant toaster in West Texas and be paid by generators to operate it.

As is usually the case on KP, the whole post is clear and well argued and provides great background information. Definitely read the whole thing yourself. Then rethink your position on the PTC.

As the wind moves through a wind turbine’s blades, pressure drops behind them by five to 10 kilopascals (a pascal is a unit of pressure), and any bat unlucky enough to blunder into such an undetectable low pressure zone would find its lungs and blood vessels rapidly expanding and, quickly, bursting under the new conditions.

There are two articles in today’s New York Times that you should read. First, Matthew Wald discusses the limits of our current electric grid:

The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not.

The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads.

“We need an interstate transmission superhighway system,” said Suedeen G. Kelly, a member of the Federal Energy Regulatory Commission.

While the United States today gets barely 1 percent of its electricity from wind turbines, many experts are starting to think that figure could hit 20 percent.

Achieving that would require moving large amounts of power over long distances, from the windy, lightly populated plains in the middle of the country to the coasts where many people live. Builders are also contemplating immense solar-power stations in the nation’s deserts that would pose the same transmission problems.

The grid’s limitations are putting a damper on such projects already. Gabriel Alonso, chief development officer of Horizon Wind Energy, the company that operates Maple Ridge, said that in parts of Wyoming, a turbine could make 50 percent more electricity than the identical model built in New York or Texas.

Jenny Anderson then surveys the trend towards privatizing infrastructure investment. I won’t quote from the article (just go read it!) but the figure that pops out is the $1.6 trillion that the U.S. needs in infrastructure investment in the next 5 years. The article is focused on infrastructure like roads, bridges, and airports, but it is easy to draw links to the need for investment in the electric grid. Can we get private investment in the electric grid? I think T. Boone Pickens has discussed building his own transmission lines to support his proposed wind farms in Texas, but I wonder whether he can solve the NIMBY issues.

Here is Felix Salmon arguing that private investment in infrastructure is a good thing and will be more efficient over the long run.

More update: Ryan Avent has some very smart thoughts about the incentives for private investors in infrastructure. I’ll add that the experience with BAA and London airports suggests that even when it appears that private investors have properly aligned incentives to invest in infrastructure the actual outcome can be suboptimal. Is this a moral hazard problem arising from implicit government backing of the arrangement? Competition from other firms whose infrastructure is subsidized? Strategic behavior to maximize revenue rather than welfare?

1. How huge is a “huge chunk”? In a recent Rolling Stone interview, Barack Obama said that he would rebate a “huge chunk” of carbon auction revenue back to taxpayers. I heard this through Peter Barnes’ cap and dividend website. For previous commentary on cap and dividend see here and here.

2. What the hell does T. Boone Pickens want? I’m sure you’ve all seen his new wind commercial:

Am I the only person who finds this ad creepy? He doesn’t even ask for anything. Does he want subsidies for the 4 GW worth of wind turbines he just bought? Also, what’s with the “I’m T. Boone and this is my ad” moment at the end?

3. This sounds familiar. Finally, I started reading Rabbit is Rich last night and here’s how the book, which is set in the 1970s, opens,

Running out of gas, Rabbit Angstrom thinks as he stands behind the summer-dusty windows of the Springer Motors display room watching the traffic go by on Route 111, traffic somehow thin and scared compared to what it used to be. The fucking world is running out of gas.

The DOE, in conjunction with Black & Veatch and AWEA, finally released its long awaited 20% Wind Energy by 2030 study (PDF) yesterday. I haven’t read the whole thing yet as I’m still swamped at work, but here are some quick highlights from the DOE press release:

Annual installations need to increase more than threefold. Achieving 20 percent wind will require the number of annual turbine installations to increase from approximately 2000 in 2006 to almost 7000 in 2017.

Costs of integrating intermittent wind power into the grid are modest. 20 percent wind can be reliably integrated into the grid for less than 0.5 cents per kWh.

No material constraints currently exist. Although demand for copper, fiberglass and other raw materials will increase, achieving 20 percent wind is not limited by the availability of raw materials.

Transmission challenges need to be addressed. Issues related to siting and cost allocation of new transmission lines to access the Nation’s best wind resources will need to be resolved in order to achieve 20 percent wind.

Most notably, the report identifies opportunities for 7.6 cumulative gigatons of CO2 to be avoided by 2030, saving 825 million metric tons in 2030 and every year thereafter if wind energy achieves 20 percent of the nation’s electricity mix.

More to come on this once I’ve had a chance to go through it carefully.

When I was in Russia a few years ago a friend told me a corny, but somehow interesting joke. She told me that the Russian word for a breeze or a draft in a room is pronounced “dooit” (literally, “it blows”). So if you speak both Russian and English, you sometimes say to people, “Close the window. Do it.”, and laugh.

That was a very tangential segue to my second skeptical RPS post of the day. Yesterday I was at a renewables meeting with Peter Bierden, Director of Global Wind Projects at GE Energy. He was going along talking about how great wind energy is when suddenly he dropped this little tidbit of information on the group: GE, by far and away the largest turbine manufacturer in the US, is so backed up that you can’t even place an order for delivery prior to 2010. Every electricity model out there, RFF’s included, predicts meeting the overwhelming majority of renewable generation requirements with wind energy in the short to medium term. Now Peter didn’t discuss exactly how many turbines were set to be delivered, but the fact that they’re booked solid prior to Congress passing an energy bill does not bode well.

Ironically, Congress’s ridiculous, discontinuous approach the the federal production tax credit (PTC) is probably the main source of GE’s current supply constraints. When a Republican congress allowed the PTC to lapse last, in 2003, GE was left holding the bag on its contracts in progress with suppliers. Now we’re going through this charade all over again, as Congress debates whether or not to extend the PTC. Yet, even if they do decide to extend it another year, according to Bierden’s comments, that won‘t affect wind installation at all, as turbine purchasers today would be concerned with a PTC in 2011.

The numbers sound small: Nationwide, collisions kill about 2.3 birds of all varieties per turbine per year, studies show. In the Northwest, it’s about 1.9 birds per turbine. That could mean more than 3,000 bird deaths a year in the gorge.

But birders say those numbers are meaningless because the totals make no distinction between abundant and rare species. Golden eagles and ferruginous hawks — a threatened species in Washington — already are few in number, said Michael Denny of the Blue Mountain Audubon Society, and even a few fatalities could prove devastating.

Many existing or proposed wind farms in Washington and Oregon are located in the eastern Columbia River Valley, an area that overlaps with the breeding grounds of the aforementioned ferruginous hawk.

Basically, the whole matter is summed up nicely by Darren Huseby, regional director of development company enXco:

“The reality of our economy, our way of life is that we need to build certain facilities to provide electricity,” and they will have certain effects on the environment, he said. “It’s a societal question: What degree of (bird) mortality are they willing to accept?”

The tradeoffs are clear. Wind turbines are going to have some negative impact on bird populations (unless, perhaps, if they are sited offshore). However, burning coal and natural gas for electricity has obvious consequences as well. This is a classic case for cost-benefit analysis and another reason environmental valuation is such an important technique to develop.